Badger Meter Reports Record Second Quarter 2024 Financial Results
Second Quarter 2024 Highlights
-
Record total sales of
$216.7 million , 23% higher than the prior year’s$175.9 million . - Operating profit increased 41% year-over-year, with operating profit margins expanding 240 basis points to a record 19.2% from 16.8%.
-
Diluted earnings per share (EPS) increased 47% to
$1.12 , up from$0.76 in the comparable prior year quarter. -
Introduced BlueEdge™, the platform brand aimed at simplifying the
Badger Meter suite of scalable solutions integrating water technology, software and services for efficient water management. - Released 2023 Sustainability Report illustrating value-enhancing linkage between financial and ESG performance.
“Our second quarter sales surpassed the
Second Quarter Operating Results
Utility water sales increased 26% year-over-year reflecting broad-based growth across the comprehensive suite of smart water offerings, most notably the adoption of our differentiated cellular AMI solution. This includes higher sales of ORION® Cellular endpoints and BEACON® Software as a Service (SaaS) coupled with increased water meter volumes, both mechanical as well as E-Series® Ultrasonic meters. Utility water sales also benefitted from the conversion of elevated backlog.
Sales of flow instrumentation products increased 5% year-over-year with solid growth in the water-focused end markets such as wastewater, globally.
Operating earnings increased 41% year-over-year, with operating profit margins reaching a record 19.2% in the second quarter of 2024, a 240-basis point improvement from the prior year’s 16.8%. Gross margin dollars increased
SEA expenses in the second quarter of 2024 were
The tax rate for the second quarter of 2024 was 23.8%, below the prior year’s 25.8% due partially to a discrete benefit related to equity compensation transactions. As a result of the above, combined with increased interest income year-over-year, EPS was a record
Outlook
Bockhorst continued, “At the halfway point of the year, we remain pleased with our execution and ability to capitalize on the durable macro trends benefiting the water industry. Our bid funnel and order rates remain constructive, yet as we have long communicated, we face increasingly difficult year-over-year comparisons as the year progresses. With a normalizing backlog, our focus remains on high single digit sales growth in the back half of the year and over the cycle, along with modest operating margin expansion year-over-year, driven by favorable sales mix, value-based price/cost management and SEA leverage. Our balance sheet remains favorably aligned to both organic and acquisition-related growth investments to drive our long-term performance.
As we continue to move beyond the meter, we’ve given a name - BlueEdge - to our expanding suite of end-to-end smart water offerings that give customers the ability to tailor and customize solutions to best meet their unique water resource management needs. These connected devices deliver valuable insights aimed at solving customer challenges across the water cycle. BlueEdge also serves as a strategic lens through which we can evaluate growth investments.
We published our 2023 sustainability report during the quarter which highlights our incremental progress on mitigating ESG risks, reducing costs and enabling customer sustainability outcomes. By both managing and enabling sustainability we aim to safeguard our future.
Bockhorst concluded, “Our resilient end markets, business momentum and our continued focus on innovation and execution provides us with confidence in our ability to increase shareholder value while we enable customers to preserve the world’s most precious resource.”
Conference Call and Webcast Information
Safe Harbor Statement
Certain statements contained in this news release, as well as other information provided from time to time by
About
With more than a century of water technology innovation,
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CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS |
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(in thousands, except share and earnings per share data) |
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Three Months Ended |
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Six Months Ended |
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2024 |
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2023 |
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2024 |
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2023 |
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(Unaudited) |
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(Unaudited) |
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(Unaudited) |
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(Unaudited) |
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Net sales |
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$ |
216,658 |
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$ |
175,858 |
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$ |
412,938 |
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$ |
334,959 |
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Cost of sales |
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131,290 |
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106,424 |
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250,392 |
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202,709 |
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Gross margin |
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85,368 |
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69,434 |
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162,546 |
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132,250 |
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Selling, engineering and administration |
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43,856 |
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39,932 |
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84,456 |
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77,702 |
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Operating earnings |
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41,512 |
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29,502 |
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78,090 |
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54,548 |
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Interest income, net |
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(1,862 |
) |
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(827 |
) |
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(3,389 |
) |
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(1,449 |
) |
Other pension and postretirement costs |
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12 |
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33 |
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25 |
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65 |
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Earnings before income taxes |
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43,362 |
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30,296 |
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81,454 |
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55,932 |
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Provision for income taxes |
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10,306 |
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7,803 |
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19,267 |
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14,024 |
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Net earnings |
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$ |
33,056 |
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$ |
22,493 |
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$ |
62,187 |
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$ |
41,908 |
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Earnings per share: |
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Basic |
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$ |
1.13 |
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$ |
0.77 |
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$ |
2.12 |
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$ |
1.43 |
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Diluted |
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$ |
1.12 |
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$ |
0.76 |
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$ |
2.11 |
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$ |
1.42 |
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Shares used in computation of earnings per share: |
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Basic |
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29,361,034 |
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29,272,693 |
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29,341,407 |
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29,264,166 |
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Diluted |
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29,528,938 |
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29,447,525 |
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29,512,362 |
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29,434,467 |
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CONSOLIDATED CONDENSED BALANCE SHEETS |
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(in thousands) |
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Assets |
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2024 |
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2023 |
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(Unaudited) |
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Cash and cash equivalents |
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$ |
226,212 |
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$ |
191,782 |
Receivables |
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106,229 |
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|
83,507 |
Inventories |
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161,266 |
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153,674 |
Other current assets |
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15,510 |
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13,214 |
Total current assets |
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509,217 |
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442,177 |
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Net property, plant and equipment |
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72,454 |
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73,878 |
Intangible assets, at cost less accumulated amortization |
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50,178 |
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53,737 |
Other long-term assets |
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36,056 |
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33,964 |
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113,355 |
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113,163 |
Total assets |
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$ |
781,260 |
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$ |
716,919 |
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Liabilities and Shareholders' Equity |
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Payables |
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$ |
96,011 |
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$ |
81,807 |
Accrued compensation and employee benefits |
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21,768 |
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29,871 |
Other current liabilities |
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20,340 |
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20,270 |
Total current liabilities |
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138,119 |
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131,948 |
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Deferred income taxes |
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4,838 |
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5,061 |
Long-term employee benefits and other |
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75,165 |
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63,428 |
Shareholders' equity |
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563,138 |
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|
516,482 |
Total liabilities and shareholders' equity |
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$ |
781,260 |
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$ |
716,919 |
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CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS |
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(in thousands) |
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Three Months Ended |
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Six Months Ended |
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2024 |
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2023 |
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2024 |
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2023 |
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(Unaudited) |
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(Unaudited) |
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(Unaudited) |
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(Unaudited) |
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Operating activities: |
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Net earnings |
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$ |
33,056 |
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$ |
22,493 |
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$ |
62,187 |
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$ |
41,908 |
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Adjustments to reconcile net earnings to net cash provided by operations: |
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Depreciation |
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2,849 |
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2,775 |
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5,741 |
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5,438 |
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Amortization |
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5,242 |
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4,132 |
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10,360 |
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8,416 |
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Deferred income taxes |
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- |
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(366 |
) |
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- |
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(376 |
) |
Noncurrent employee benefits |
|
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(22 |
) |
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(185 |
) |
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(21 |
) |
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(222 |
) |
Stock-based compensation expense |
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2,010 |
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|
1,601 |
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|
|
3,281 |
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|
|
|
2,607 |
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Changes in: |
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Receivables |
|
|
(14,053 |
) |
|
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|
340 |
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(23,217 |
) |
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(6,503 |
) |
Inventories |
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(851 |
) |
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|
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(12,314 |
) |
|
|
|
(7,256 |
) |
|
|
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(23,753 |
) |
Payables |
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|
5,379 |
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|
|
|
1,145 |
|
|
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|
13,339 |
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|
8,104 |
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Prepaid expenses and other assets |
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(424 |
) |
|
|
|
(2,847 |
) |
|
|
|
(8,489 |
) |
|
|
|
(4,980 |
) |
Other liabilities |
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|
3,233 |
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|
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|
5,995 |
|
|
|
|
1,954 |
|
|
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|
10,100 |
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Total adjustments |
|
|
3,363 |
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|
276 |
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(4,308 |
) |
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|
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(1,169 |
) |
Net cash provided by operations |
|
|
36,419 |
|
|
|
|
22,769 |
|
|
|
|
57,879 |
|
|
|
|
40,739 |
|
|
|
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Investing activities: |
|
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Property, plant and equipment expenditures |
|
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(2,341 |
) |
|
|
|
(2,664 |
) |
|
|
|
(5,017 |
) |
|
|
|
(6,935 |
) |
Acquisitions, net of cash acquired |
|
|
- |
|
|
|
|
(75 |
) |
|
|
|
(3,000 |
) |
|
|
|
(17,127 |
) |
Net cash used for investing activities |
|
|
(2,341 |
) |
|
|
|
(2,739 |
) |
|
|
|
(8,017 |
) |
|
|
|
(24,062 |
) |
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Financing activities: |
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Dividends paid |
|
|
(7,934 |
) |
|
|
|
(6,591 |
) |
|
|
|
(15,876 |
) |
|
|
|
(13,217 |
) |
Proceeds from exercise of stock options |
|
|
521 |
|
|
|
|
- |
|
|
|
|
751 |
|
|
|
|
58 |
|
Net cash used for financing activities |
|
|
(7,413 |
) |
|
|
|
(6,591 |
) |
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|
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(15,125 |
) |
|
|
|
(13,159 |
) |
Effect of foreign exchange rates on cash |
|
|
237 |
|
|
|
|
5 |
|
|
|
|
(307 |
) |
|
|
|
235 |
|
|
|
|
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|
|
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Increase in cash and cash equivalents |
|
|
26,902 |
|
|
|
|
13,444 |
|
|
|
|
34,430 |
|
|
|
|
3,753 |
|
Cash and cash equivalents - beginning of period |
|
|
199,310 |
|
|
|
|
128,361 |
|
|
|
|
191,782 |
|
|
|
|
138,052 |
|
|
|
|
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|
|
|
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|
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Cash and cash equivalents - end of period |
|
$ |
226,212 |
|
|
|
$ |
141,805 |
|
|
|
$ |
226,212 |
|
|
|
$ |
141,805 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240719607264/en/
(414) 371-7276
kbauer@badgermeter.com
Source: